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Vietnam Growth Quickens

Gross domestic product rose 7.01% in the fourth quarter from a year earlier, quickening from a revised 6.87% gain in the three months through September, according to data released by the General Statistics Office in Hanoi on Saturday. In 2015, the economy grew 6.68%, beating the government’s 6.2% target. That compares with a median estimate of 6.6% in a Bloomberg survey.

Vietnam’s economic growth “has gained momentum gradually and is now being supported both by exports of foreign-invested enterprises and domestic demand,” Jonathan Dunn, the International Monetary Fund’s resident representative in Vietnam said in a statement released Dec. 5 in Hanoi.

The State Bank of Vietnam weakened the dong three times this year to spur exports after China depreciated the yuan, dragging exchange rates lower across Asia. Vietnam’s economic growth in 2015 may be the fastest among six major Southeast Asian countries tracked by the Asian Development Bank, the ADB said in a recent report.

Exports rose 8.1% in the 12 months through December from a year earlier to $162.4 billion, with 71% coming from foreign companies. Imports climbed 12% from a year earlier for the same period.

Retail sales gained 9.5% in Jan.-Dec. from year earlier while industrial production jumped 9.8% in the same period from a year earlier. Manufacturing rose 10.6% from the previous year.

The government will focus on steps to bolster businesses, particularly the private sector, as part of its attempt to increase the country’s productivity in 2016-2020, Prime Minister Nguyen Tan Dung said Dec. 5. Vietnam’s legislature last month passed a 2016 GDP target of 6.7%.

Much of the growth has been fueled by low oil prices and a flurry of international interest with disbursed foreign investment surging 17.4% compared to last year with a record-high of $14.5 billion.

The strong showing is a significant jump on the last two years. In 2014 Vietnam’s GDP growth was just under 6%, while that of 2013 was only 5.42%.

On Wednesday, Vietnam released an annual inflation rate of just 0.63% in 2015, the lowest in 14 years.